Correlation Between Grong Sparebank and SpareBank
Can any of the company-specific risk be diversified away by investing in both Grong Sparebank and SpareBank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Grong Sparebank and SpareBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grong Sparebank and SpareBank 1 stlandet, you can compare the effects of market volatilities on Grong Sparebank and SpareBank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Grong Sparebank with a short position of SpareBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grong Sparebank and SpareBank.
Diversification Opportunities for Grong Sparebank and SpareBank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grong and SpareBank is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grong Sparebank and SpareBank 1 stlandet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpareBank 1 stlandet and Grong Sparebank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Grong Sparebank are associated (or correlated) with SpareBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpareBank 1 stlandet has no effect on the direction of Grong Sparebank i.e., Grong Sparebank and SpareBank go up and down completely randomly.
Pair Corralation between Grong Sparebank and SpareBank
Assuming the 90 days trading horizon Grong Sparebank is expected to generate 1.29 times less return on investment than SpareBank. But when comparing it to its historical volatility, Grong Sparebank is 1.06 times less risky than SpareBank. It trades about 0.06 of its potential returns per unit of risk. SpareBank 1 stlandet is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12,148 in SpareBank 1 stlandet on September 4, 2024 and sell it today you would earn a total of 2,834 from holding SpareBank 1 stlandet or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Grong Sparebank vs. SpareBank 1 stlandet
Performance |
| Timeline |
| Grong Sparebank |
| SpareBank 1 stlandet |
Grong Sparebank and SpareBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grong Sparebank and SpareBank
The main advantage of trading using opposite Grong Sparebank and SpareBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grong Sparebank position performs unexpectedly, SpareBank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SpareBank will offset losses from the drop in SpareBank's long position.| Grong Sparebank vs. Nordic Mining ASA | Grong Sparebank vs. Aasen Sparebank | Grong Sparebank vs. Proximar Seafood AS | Grong Sparebank vs. Instabank ASA |
| SpareBank vs. Sparebank 1 SMN | SpareBank vs. Sparebank 1 Nord Norge | SpareBank vs. Sparebanken Vest | SpareBank vs. Pareto Bank ASA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |